Telecom panel report puts Reliance Jio in a spot

The only option before the government is to levy hefty fine if a violation is detected so that it acts as a deterrent.

New Delhi |
Published:July 4, 2014 12:53 pm

The only option before the government is to levy hefty fine if a violation is detected so that it acts as a deterrent. (Reuters)

In a setback to the government, a committee tasked with finding ways of segregating revenues of broadband wireless access spectrum from 2G and 3G services has said there’s no foolproof mechanism to do so. The committee has come to the conclusion after going through several options, including the ones suggested by Reliance Jio and Bharti Airtel, the two operators that have spectrum in the 2300 MHz (BWA) and 1800, 900 and 2100 MHz (2G and 3G) bands.

This is significant as the panel was constituted by the department of telecommunications after the UPA had in January decided there would be differential spectrum usage charge for BWA operators and those who held 2G and 3G spectrum. While those with 2G and 3G spectrum are required to pay SUC at 5% of their revenue, BWA operators need to pay only 1%. Crucial to the implementation of this measure is a mechanism to segregate the revenues so there’s no arbitrage available to those with both bands of spectrum.

Citing the available technical measures the committee has concluded that they are not foolproof and can be tampered by the operators. The only option before the government is to levy hefty fine if a violation is detected so that it acts as a deterrent.